At Dutton Associates, we provide research coverage on over 100 companies with exciting prospects for growth that, as yet, have not attracted broad research coverage.
The Dutton Associates Focus List seeks to identify particularly timely investment opportunities within our coverage universe. Although not actually a trading list, the time-horizon for these selections, 3-to-9 months, is shorter than the 12-month basis upon which Dutton Associates ratings are based. Investors should assess the suitability of individual stocks based both on quality and liquidity.
While this page provides brief descriptions of these companies, we recommend investors learn more about them, and the rest of our coverage universe, by browsing our website. Click on any name below to view all our published research on that company.
Click here for Focus List updates and commentary by our Senior Analyst, Paul J. Resnik, CFA
Click here for an overview of the performance of our focus list picks versus the Russell 2000 index.
This list current as of: Thursday, 24-Jul-2008 19:30:23 PDT
DXP Enterprises Inc (Nasdaq: DXPE) , a distributor of industrial supplies, has achieved impressive earning gains over the past few years based on improving margins, double-digit internal sales growth, and a string of accretive acquisitions. The Company is expected to continue its rapid growth as it benefits from acquisitions, new installations of its SmartSource inventory management service, additional Service Centers, strong demand for its innovative pumping solutions operation, and accretive acquisitions. Although DXP serves a broad spectrum of industry from an expanding geographic footprint, strength in the energy sector has been a factor in its excellent growth. Last September, the Company acquired a business with $270 million in sales that we believe is an excellant fit with DXP's operation. We view the shares as particularly attractive at current levels.
Elron Electronic Industries LTD. (Nasdaq: ELRN) is an investment holding company with a portfolio of public and private companies and a significant cash position. We believe that Elron is at the beginning of a new wave of value creation by recognizing higher values of its group companies. Yet the stock sells at about a 35% discount to its net asset value (NAV) near $18.50. We believe this stock's significant discount to NAV limits downside risk in the current difficult market environment while the growth attributes of its investments provide appreciation potential beyond its current NAV.
Lime Energy Corp. (Nasdaq: LIME) is more than just a name change it is a "new" company with new management, new ownership, new business model, new financial structure and new prospects for revenue and earnings. The Company addresses a large and growing market for corporations and government agencies that wish to reduce their demand for electricity. The "new" company is now a sales and marketing company that is up and running with established operating companies that have proven records of revenue and earnings growth, a proven sales team, and a strong financial infra structure. Lime Energy has cleaned up its balance sheet now has approximately $7.0 million in cash, no debt or derivatives, and no preferred stock with onerous dividend requirements.
Revett Minerals Inc. (TSX: RVM) shares have moved lower since our Initial Report on this copper-silver mining company with an operating mine (Troy) and a nearby large undeveloped deposit (Rock Creek) in Montana, despite positive news from the Company. Revett reported second quarter production of 3.5 million pounds of copper and 372,330 ounces of silver at the Troy mine which we believe demonstrates the effective restart of the mine with potential for rising production. Growing revenues from Troy should provide additional cash flow for developing Rock Creek, one of the 20 largest undeveloped silver properties in the world. While the commercialization of Rock Creek is a number of years away, we believe the resumption of development efforts at Rock Creek during the current high metal price environment will support higher prices for Revett shares. Near term, the ramping up of production during a time of rising metals prices could generate positive earnings surprises and act as a catalyst for appreciation. Our 12-month price target for the stock is $2.75 (US). The stock's primary market is on the Toronto exchange.
Seabridge Gold Inc (AMEX: SA) Seabridge Gold has acquired a 100% interest in several North American gold resource projects. Despite the move of gold to over $1000/oz., Seabridge has pulled back over 35% from its October 2007 high of $39.50. As the Company continues to expand its resource estimates at its North American development sites, we believe this pullback represents an excellent buying opportunity.
Sofame Technologies Inc. (TSX.V: SDW) We believe Sofame Technologies Inc. (CDNX: SDW.V) represents a timely investment for those looking for a vehicle to participate in the opportunities created by the increasing economic and environmental pressure for energy conservation and pollution reduction. Sofame custom engineers and manufactures unique, high-efficiency direct-contact heat recovery and hot water heating systems. Sofame's products extract up to 99% of heat from flue gases depending on the application, and also from wastewater, and return the energy in the form of high temperature hot water or superheated make-up air. In addition to economically recovering heat from waste energy, Sofame's products also help customers to significantly reduce greenhouse gas emissions. Using world leading, patented green technology, the Company serves building owners, institutional, industrial and commercial markets through a network of dedicated engineering representatives.
